Job relocation homes can be bargains

October 25, 1992|By New York Times News Service

Like many couples scouring the residential real estate market these days, Chuck and Eileen Slater were looking for a steal. They had outgrown and sold their three-bedroom Cape Cod in Ridgewood, N.J., and wanted to take advantage of depressed home prices in the New York metropolitan region.

The Slaters weren't disappointed. After a brief search, they found a four-bedroom, federal-style home on a third of an acre in Ramsey, N.J., for $340,000. Not exactly a fire-sale price, but far lower than comparable homes in the affluent community.

"We were very lucky," Mrs. Slater said. "I know I could have turned around and, two weeks later, sold it for at least $15,000 more."

The house the Slaters stumbled on was not in foreclosure or financial distress; rather, it was part of a corporate relocation, a "relo" in industry argot. It had been owned by an IBM employee who had been transferred.

Relocation homes have never been a large part of the resale market; only about 350,000 home sales, or 10 to 15 percent of the market, involve corporate relocations each year.

Moreover, the number of transfers appears to be declining as companies, hard hit by the recession, become more cost-conscious. Relocation policies at many companies have been changed to give employees greater financial incentives to sell their homes rather than have them taken over by their employer or by a company specializing in relocation management.

By paying bonuses to employees who sell their own homes, companies hope to minimize the expenses of owning and maintaining an inventory of housing.

"Generally, relocation homes are very good opportunities for the general consumer," said John Featherston, publisher of National Relocation and Real Estate magazine in Westport, Conn.

Steven E. Betti, 32, believes he saved 10 percent off the price of a two-bedroom condominium that he bought for $122,000 in May in Tenafly, N.J. It had been owned by a transferred IBM employee and been vacant for four months.

The unit Mr. Betti bought had been appraised at $135,000. "You always hear about these great bargains out there," he said. "Well, I'm comfortable with what I paid. I don't feel like I did too bad at all."

For the most part, when an employee who owns a home is transferred, he or she has up to 60 or 90 days to sell the home. If it is sold at a loss, the company, in many cases, reimburses the employee for some or all of the loss; if the home doesn't sell, the company buys it at the current appraised value.

Meanwhile, the company hires a relocation company to manage and market the home.